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Invensysrail: Pensions Update

29 April 2013

Update on Pensions situation.

 

Update

Over the last few weeks the Trade Unions in conjunction with the company council reps have been seeking to improve the pensions offering from Siemens, get better clarity on how the changes would affect you individually and ensure that your interests were fully being looked after. This has been a frustrating time for all concerned from the ‘staff side’ as Invensys has, amongst other things, blocked Trade Union officials from being directly involved in the consultation exercise and responses to questions have taken a long time or not been received at all. All in all the impression we have is that time has been against us and we feel that the company have deliberately been slow to respond in order to maximise confusion amongst staff in the hope that you would simply give up and/or that this strategy would result in dividing opinions between you and your colleagues.

Belatedly (after the official consultation period ended) Siemens agreed to meet Trade Union officials and some company council representatives on Thursday 25 April. However this meeting was only scheduled for one hour. Our distinct impression was that they wanted to use it as a ‘tick box’ exercise with no real intent to do anything about the concerns members and their trade unions have on the serious shortcomings and unfairness of the new pension arrangements.

TSSA made clear that whilst we need to develop relationships with Siemens going forward the priority issue for our members at present was the pensions situation and as a result that would continue to be our main focus. The following points were made:

  • we remained concerned that despite repeated requests there was not even anecdotal information for individuals on how they were likely to be affected, something that we would expect in any other consultation of this nature. Also those in the Railway Pension Scheme still didn’t know where they stood long term.

  • we were concerned with the imposed timescales for people to express an interest and complete forms for the Siemens Investment planner. We asked for timescales to be extended if possible.

  • we felt that whilst it was a step in the right direction that the company had improved their pension offerings in terms of the contribution rates this still didn’t meet member’s aspirations and they should consider offering more and improving what was on offer for those currently in a Defined Contribution scheme.

  • we explained that in the market that Invensys currently operates staff are their main asset and people quiet often change employers within the sector. It is important, therefore, to prioritise retaining and motivating staff by offering decent benefits. We argued that not retaining staff will hamper their ability to compete in this market and therefore serious consideration needs to be made to addressing this risk.

Siemen’s response

Siemen’s advised that they had taken consideration of previous arguments made by the company council and had re-evaluated the market which had led to them reassessing the pensions offering but that they would take back our concerns and respond by Friday 26 April on whether they could extend the 7 May deadline and respond by mid-week (week commencing 29 April) on whether they could offer anything more by way of pensions contributions. They also advised that they would be running pensions road shows and advisers would be on hand. However, they wouldn’t be in a position to offer independent financial advice. We advised that we would prefer to be in a position to send out more positive communications on the pensions issues and that a further improvement to the offer would assist us with doing this.

Unfortunately, to date, no response has been received on either of these topics. It is clear no progress would have been made without you all making clear your objections to the original proposals that assisted the Company Council and Trade Unions in raising concerns. If you are still unhappy with the offer then please make this clear via your company council reps and the askevin@inveneys.com mailbox.

What is the current offer?

For those members of the IPS Defined benefit scheme Siemen’s are offering contributions to their defined contribution Investor Plan Scheme with an enhanced employer contribution which diminishes over a 10 year period. The maximum employer contributions are shown below and whilst the minimum employee contribution would be 3% we have been advised that the employer contributions would be a on a pro-rata basis i.e. in year 1 for every 1% employee contributes the employer will contribute 1.75%:

Period

Employee Contribution

Employer Contribution

Up to 31st Dec 2013

10%

17.5%

1st Jan 2014 – 31st Dec 2014

10%

17%

1st Jan 2015 – 31st Dec 2015

10%

16.5%

1st Jan 2016 – 31st Dec 2016

10%

16%

1st Jan 2017 – 31st Dec 2017

10%

15.5%

1st Jan 2018 – 31st Dec 2018

10%

15%

1st Jan 2019 – 31st Dec 2019

10%

15%

1st Jan 2020 – 31st Dec 2020

10%

15%

1st Jan 2021 – 31st Dec 2021

10%

15%

1st Jan 2021 – 31st Dec 2022

10%

15%

1st Jan 2023 onwards

10%

10%

For those currently within a Defined Contribution scheme or not currently in a pensions scheme the original offer is unchanged at between 3-10% employee contributions matched by the employer, so if you contribute 10% the employer will contribute 10%.

Advice

Some of you may have received advice to wait to complete your Investor Plan forms. This was on the basis that we could meet with Siemens to make representations on your behalf and then seek further advice. We are still hopeful that Siemens will see sense and further improve the employer contributions that are on offer to you. Unfortunately, like your employer, TSSA is not able (qualified) to advise when it comes to deciding what to do with the pension forms you have been sent because this could constitute financial advice. In the absence of a further response from the company there is currently no change to the deadline of 7 May. If anything changes we will make you aware as soon as the company communicates with us.

All we can say is that saving for retirement is a good thing and in a DC scheme, what you get out at retirement will, amongst other things, depend on how much you and your employer put in the more you put in the bigger the pension you are likely to get out at the end. You may wish to take independent financial advice on this.

What next?

We await a response from Siemens on whether they will be prepared to consider the arguments that we have put to them. Ultimately their success or failure in this market may come down to this decision, let’s hope that they make the right one to recognise your worth within their future company. Please continue to speak to your reps and let the company know what you think through the company mail box. Whatever the outcome of the current situation, with your support we will continue to try to address issues that have still not been resolved to your satisfaction!

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